The EUR/USD Exchange rate fell to its lowest level in two weeks on Thursday after the ‘Greenback’ rallied strongly following the release of better than forecast jobless claims data.

According to data released by the US Labour Department the number of people claiming jobless benefits rose slightly last week but was less than economist forecasts and remained close to a three-month low, suggesting that the US jobs market is stabilising. Claims rose by 5,000 to a seasonally adjusted 320,000 last week. Economists had been forecasting a rise of 10,000.

The main booster for the ‘Greenback’ however was the growing expectations that the Federal Reserve will raise interest rates sooner than previously expected. The Central Bank also said that it was further tapering its monetary easing programme. The monthly bond buying programme is now at $55 billion per month.

New Federal Reserve Chairman Janet Yellen indicated that the bank could begin to raise interest rates about six months after the bond-buying program winds up, which is expected to happen this fall. The comments prompted investors to bring forward expectations for a rate hike to as soon as April of next year.

The Euro was weakened early in the session by disappointing PPI data out of Germany and a report which showed that unemployment unexpectedly increased in the Netherlands.

The single currency was also weakened by an announcement by US President Barrack Obama that the USA is preparing to impose economic sanctions against Russia if it escalates the situation in Ukraine further. He warned that such measures could disrupt not just the Russian economy but also the wider worlds.